PM refers to 'Palestinian state'

Jerusalem - Israeli Prime Minister Benjamin Netanyahu on Sunday for the first time since being elected in February referred to a "Palestinian state", but at the same time expressed reservations.

"Clearly we need to have some reservations about a Palestinian state in a final status agreement," he told the weekly Cabinet meeting, the first since his first official meeting with US President Barack Obama in Washington.

"These things were voiced clearly before the president in Washington," Netanyahu said. "When we reach an agreement on substance, we will reach agreement on terminology."

It marked the first time that Netanyahu said the words "Palestinian state" since the February 10 legislative election that saw his right-wing Likud party come second, eventually returning him to the Prime Minister's office.

He stopped short, however, of backing the concept of the Palestinian state, a bedrock principle of international Middle East peacemaking efforts.

Netanyahu and his largely right-wing Cabinet were sworn in on March 31.